HUN expects the new pigments, additives and textile effects company will begin trading on the NYSE sometime during H1 2017.

The new company will focus on titanium dioxide, or TiO2, which is used as a pigment for various items including food coloring, paints, coatings and sunscreen, but the business is more cyclical than HUN’s other divisions.

“TiO2 prices are improving and with additional increases expected in the future, the timing of our spinoff should be well positioned,” says HUN President and CEO Peter Huntsman.

The Wanhua Chemical Group plant in Yantai City, China, accounts for 8% of the global supply of methylene diphenyl diisocyanate, which is used to make polyurethanes in hundreds of applications including foam cushioning and rigid insulation.

HUN stands to benefit should the explosion extend the month-long plant shutdown as that would further tighten the MDI market in Asia, Nomura says.

HUN says it is selling its surfactants plants in France, Italy and Spain, but that it remains dedicated to its surfactants business in the U.S. and Australia; surfactants are chemicals used to make detergents and other products, such as disperants, for cleaning up oil spills.

HUN says it plans to enter into supply and long-term tolling arrangements with IOSP to continue marketing some of the products.

After debating for many months which route to take, Huntsman CEO Peter Huntsman says a spin allows the company to have a process it can control, also noting that shareholders should benefit.

HUN’s biggest financial drag has been its titanium dioxide plants, and is in the process of closing a plant in South Africa, but the CEO says since the titanium dioxide business is coming back to a small profit with growth potential, the business is ready to stand on its own and stop harming the value of HUN’s stock.

HUN says closing the facility will have a cash payback of less than two years, and cost savings are in addition to ~$200M previously announced.

HUN says the closure increases the competitive positioning of its Pigments and Additives business as it prepares to separate the business through a spinoff to its shareholders or other strategic transaction.

Huntsman (HUN+1.2%) reverses early losses of as much as 8% after saying during its earnings conference call that it plans to spin off its TiO2 unit when market conditions permit; analysts say the unit could fetch $2B-$2.5B.

"We should be very close to being able to spin that by the end of the year,” CEO Peter Huntsman said, adding that a titanium dioxide merger or joint venture is possible with the right partner.

HUN reported better than expected Q4 earnings but below consensus revenues, and says it expects continued EBITDA pressure on its cyclical businesses as a result of lower priced oil and weaker global economic growth.

But HUN projects free cash generation to improve by $350M in 2016 because of cost reductions and fewer restructuring expenses.

HUN plans to spend ~$450M annually on capex in 2016 and 2017 after spending $663M on capex in 2015.